is there a better bargin that this, page-21

Had my first look at some rough numbers for ETE tonight.

To start with I make the fully diluted market cap to be $40 million at 17.5c (including out of the money options).

On the revenue side they have gas and oil. For the gas I adjusted up their March projection for the higher current Henry Hub spot price (US$11.28 now vs US$9.415 March) and get US$10.9 million per year. For the oil I used the full capacity of 980 bopm at US$110/bbl (don't know what price they get) and get US$1.3 million per year. At the current exchange rate this comes to AU$12.9 million annual revenue.

On the cost side I annualised their AU$5.4 million year to date cash outflow (items 1.13 - 1.1 in the quarterly), added the annualised High Island amortisation (item 2.1) and get AU$7.5 million in annual costs.

So profit before tax is AU$12.9 - AU$7.5 = AU$5.4 million. They have over AU$10 million in accumulated losses so ignoring tax this gives a PE of 40/5.4 or 7.5, a few year ago this was normal for a small oil/gas company.

Obviously these are rough numbers and don't give them anything for their prospects but I thought I would've got a lower PE. Any thoughts?